APAC Freight Market Update: December 4th, 2024

‍In this Update.

1. Asia Market.
2. USA/Canada Market.
3. Europe Market.
4. Airfreight Update.
5. General News.
6. Interesting Articles.

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Rates:

• With the impending Chinese New Year (29th Jan 2025), we can expect a surge in demand from mid-December. Rates are highly unstable at present, and space is limited. Forward booking is strongly encouraged. 
• Overland transport in China is also problematic at this time of year, so delays are to be expected. 
• Current rates for the first half of December have dipped with lessened demand. Levels vary based on carrier/service.
• Premium (A3 - Cosco/OOCL)  service is sitting at approximately USD4000 per FEU ex base port China to AU East Coast.
• CAT/CA2 service (Evergreen/PIL/Yang Ming) is sitting at approximately USD3200 per FEU ex base port China to AU East Coast. 
• The most economical option remains with Maersk (AUN service) at USD3000 per FEU ex base port China to AU East Coast. 
• West Coast and Adelaide pricing is sitting at USD4000-4300 per FEU. 
• The Drewry WCI composite index decreased 2% to $3,331 per feu, which is 68% below the previous pandemic peak of $10,377 in September 2021 but 134% more than the average $1,420 in 2019 (pre-pandemic). Source: Drewry

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• Rates out of South East Asia continue their downward trend. Capacity is starting to open up. We can expect delays at key transshipment hubs moving into Chinese New Year.
  • Thailand is sitting at USD2200 per TEU until mid-December.
  • Vietnam is sitting at USD1900-2200 per TEU.
  • Taiwan is sitting at USD2200 per TEU.
  • Singapore varies between USD1900-2200 per TEU.
  • Korea is approximately USD2200-2400 per TEU.
  • Malaysia is sitting at USD1900-2200 per TEU. 

• Pricing remains fluid, so please check for the best option at the time of booking. 

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GRIs

• Cosco is implementing a GRI of USD500.00 per TEU ex North East Asia to Australia & NZ, effective 15th December 2024.
• Cosco is implementing a GRI of USD300.00 per TEU ex South East Asia to Australia & NZ, effective 15th December 2024.

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Australian Ports:

• Wharf Infrastructure charges are set to increase come 1st January 2025. 
• Please ensure you have your Christmas hours logged with the Explorate team. We need to be aware of any closures that may impact cargo due to arrive during the holiday period. 
• We are seeing several port omissions and changes to scheduled rotations. Carriers are pushing to have their vessels back in China as soon as possible to facilitate faster loading. 
• We are starting to see congestion and delays on the domestic transport front. Long queues at several CFS partners are resulting in waiting time being incurred. In some instances, our bookings are being pushed back to the following day.
• With Christmas traffic already taking effect across our cities, please expect deliveries to be impacted. We appreciate your patience and understanding while we do our best to accommodate urgent requests and manage the chaos on the roads at this time of year.

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Capacity:

• Singapore port is congested, which is typical for this time of year. The average vessel wait time is 24-48 hours, with an average dwell time for exports of 72 hours. 
• Kaohsiung port is also showing signs of congestion. The average vessel wait time is 48 hours, with an average dwell time of up to 10 days for export vessels. This is extending overall transit times by 2 weeks. Please be aware for any transshipment via KHH.
• Vessel waiting time is increasing across most China ports. Shanghai and Qingdao are the hardest hit, with delays of up to 7 days in some cases.

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Schedule Reliability:

• CA2/CAT service has several delayed vessels in December. This will extend into January. 
• In October 2024, global schedule reliability improved by 0.9 percentage points M/M to 51.5%. So far in 2024, schedule reliability has largely stayed within the 50%-55% range. That said, despite being disappointingly low, the low levels of volatility in schedule reliability in 2024 does give shippers a relatively good idea of what to expect M/M.

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• Maersk was the most reliable top-13 carrier in October 2024 with schedule reliability of 57.9%, followed by MSC with 52.0%. 10 of the remaining 11 carriers were within the 40%-50% range, while PIL was the least reliable carrier at 37.2%. 8 of the top-13 carriers recorded a M/M improvement in schedule reliability in October 2024. Wan Hai recorded the largest increase of 5.4 percentage points, and ZIM recorded the largest decline of -3.5 percentage points. Source: Sea Intelligence

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• The US market had a quieter week due to the Thanksgiving holiday. 
• Freight rates from Shanghai to Los Angeles decreased 5% or $238 to $4,250 per FEU. Shanghai to New York and New York to Rotterdam shrank 1% to $4,490, $5,182 and $789 per feu, respectively. Source: Drewry

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• US President-elect Donald Trump has threatened to impose "100 percent tariffs" on a group of nine developing nations if they create a rival currency to the US dollar. The BRICS nations include Brazil, Russia, India, China, and South Africa. Source: ABC News
• Exporters from China, Canada, and Mexico are seeking to front-load shipments to the US after President-elect Donald Trump pledged to impose new levies on goods from the three countries on his first day in office. Trump threatened tariffs of 60 percent on goods from China — which he blames for the US trade deficit — and up to 20 percent from all other countries. Source: Financial Times

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• Rates from Shanghai to Rotterdam fell 2% or $74 to $3,997 per FEU. Likewise, rates from Shanghai to Genoa, and New York to Rotterdam shrank 1% to $4,490, $5,182 and $789 per FEU, respectively. Source: Drewry

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• Europe’s road freight industry continues to suffer from a crippling driver shortage crisis, with around half a million vacancies. According to the International Road Transport Union’s (IRU) annual driver shortage analysis, driver vacancies in Europe represent around 12% of all positions, and was broadly the same last year, largely due to depressed economic activity. Source: The Loadstar
• Blank sailings in weeks 50 and 51 will reduce capacity ex North Europe by approximately 18%. This equates to around 59,000 TEU of the standard weekly capacity. ONE will be adding an extra loader (2800 TEU)  to accommodate the anticipated demand ahead of the Chinese New Year. 
• The Asia-Europe market saw a surge in week 48. This was largely driven by the pre-Christmas rush.
• Spot rates have stabilized after taking a dip, with significant GRIs implemented by carriers on FEWB routes. Carriers are looking to push through substantial GRIs of approximately USD6000 per FEU in December. 
• We can expect blank sailings out of Europe between weeks 47-52.

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• Space out of Shanghai is overbooked and very congested. Direct options out of PVG are incredibly tight due to the large volume of e-commerce goods. BNE/SYD is particularly congested, with standby across multiple flights. Transit times are extended on the MH, JL and D7 flights - also any options via SIN are likely to be offloaded. Flight capacity is fully booked a week ahead.
• The situation is slightly better in Southern China, with capacity more open and rates stabilizing. Demand remains high.
• China’s air cargo volumes have increased nearly 20% this year compared to last year as a result of increased international demand. Between January and October of this year, the country’s aviation sector handled nearly 7.3m tonnes of cargo and mail, marking a 19.3% increase compared to the same period in 2019. Source: Air Cargo News
• Air cargo demand was up 9.8% in October, resulting in 15 months of consecutive growth. 
• Several factors in the operating environment should be noted:
  • Year-on-year, industrial production rose 1.6% in September while global goods trade increased 2.4% for a sixth consecutive month of growth. The increase in trade is partly due to businesses stockpiling inventory ahead of potential disruptions, like the US port strike.
  • Global manufacturing activity rebounded in October. The Purchasing Managers Index (PMI) for global manufacturing output was above the 50 mark, indicating growth. However, the PMI for new export orders, remained below the 50-mark, suggesting ongoing uncertainty and weakness in global trade.
  • US headline inflation, based on the annual Consumer Price Index (CPI), rose by 0.17 percentage points to 2.58% in October, ending a six-month decline. In the same month, the inflation rate in the EU increased by 0.24 percentage points to 2.33%. China’s consumer inflation fell to 0.29% in October, sparking concerns of an economic slowdown. Source: IATA

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General News.

• Diversions around the Cape of Good Hope will continue in 2025. Taking this route adds 14 days (on average) to the vessel transit time, while also increasing fuel consumption and reducing capacity in the market by approximately 4 vessels per week. This will result in ocean freight rates remaining high next year. With increased risk, comes increased cost. 
• With pending tariff changes in the USA, we can expect to see a move away from China production to South East Asia. Thailand, Malaysia, and Vietnam are already seeing huge growth and this is set to continue. This will also result in heavier export of raw materials out of China to these locations. 
• MSC sees new load ports added to its Asia-Europe and transpacific services, new destination ports added in Europe and North America, and a redesign of its Indian subcontinent transshipment network on backhaul, as well as headhaul routes. Source: The Loadstar
• Cyclone Fengal killed at least 19 people in India and Sri Lanka and caused flooding in Tamil Nadu state and the Puducherry region after crossing India's southern coast from the Bay of Bengal on Saturday. Puducherry had been hit by the heaviest 24-hour rainfall in 30 years. Source: Channel News Asia
• Beijing said on Tuesday (Dec 3) it would restrict exports to the United States of some key components in making semiconductors after Washington announced curbs targeting China's ability to make advanced chips. Among the materials banned from export are metals gallium, antimony and germanium, China's commerce ministry said in a statement that cited "national security" concerns. Source: Channel News Asia
• The death toll from flooding in southern Thailand has risen to 25, officials said on Tuesday (Dec 3), with days more heavy rain forecast. Flooding since Nov 22 has affected more than 660,000 homes in the south. Source: Channel News Asia

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Interesting Articles:

• Container Shipping Hits Record Volumes in Q3 2024
• Nation’s ports key to Australia’s economic future, backing 700,000 jobs and $650bn in trade: report reveals
• Container erupts in flames at PortMiami
• Shanghai Port smashes 40 million TEU mark
• A new trade war with US would threaten China’s 'historic' airfreight boom
• Hapag-Lloyd warns customers EU ETS surcharge will 'roughly double'

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